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United Air Lines, Inc. and British Midland Airways Limited

United requests a statement of authorization to display bmi's "BD" designator code in conjunction with foreign air transportation of persons, property, and mail on flights operated by United between (1) points in the United States; (2) points in the United States and points in the United Kingdom (either nonstop or via intermediate points in third countries); (3) points in the United States and points in third countries; and (4) points in the United Kingdom and points in
third countries. United also requests exemption authority to offer services between any point or points in the U.S. via intermediate points to a point or points in the United Kingdom and beyond.

bmi requests a statement of authorization to display United's "UA" designator code in conjunction with foreign air transportation of persons, property, and mail on flights operated by bmi between (1) points in the United Kingdom; (2) points in United Kingdom and points in the United States (either nonstop or via intermediate points in third countries); (3) points in United Kingdom and points in third countries; and (4) points in the United States and points in third countries. bmi also requests exemption authority to offer services between any point or points behind the United Kingdom via the United Kingdom and intermediate points to a point or points in the U.S. and beyond.

Counsel:  Wilmer Cutler, Jeffery Manley, 202.663.6670, jamanley@wilmer.com 

United Air Lines, Inc. and British Midland Airways Limited, Austrian Airlines Osterreichische Luftverkehrs AG, Deutcshe Lufthansa, A.G., and Scandinavian Airlines System and United Air Lines, Inc. and British Midland Airways Limited 

On September 5, 2001, United Air Lines, Inc. ("United"), British Midland Airways Limited ("BMI"), Austrian Airlines, Osterreichische Luftverkehrs AG, Lauda Air Luftfahrt AG, Deutsche Lufthansa, A.G., and Scandinavian Airlines System, and their respective affiliates (collectively, the "Joint Applicants"), filed an application for approval of and antitrust immunity for an Alliance Expansion Agreement between United and BMI, dated September 5, 2001, and a coordination agreement among the Joint Applicants, dated September 5, 2001. Based on our initial review of this application, we have determined that it is not complete.

Also on September 5, 2001, United and BMI filed a joint application for statements of authorization and related exemptions. In the interest of administrative efficiency, we have decided that the procedural schedule for responsive pleadings to both of the captioned applications should be the same. We will announce an appropriate procedural schedule for the processing of these cases at a later date.

By:  Susan McDermott

American Airlines, Inc. and British Airways PLC and United Air Lines, Inc. and British Midland Airways Limited, Austrian Airlines Osterreichische Luftverkehrs AG, Deutcshe Lufthansa, A.G., and Scandinavian Airlines System and United Air Lines, Inc. and British Midland Airways Limited 

These two highly interrelated matters should be reviewed and resolved by the Department in the course of a single proceeding, in order to ensure that the Department fully considers all of the evidence relevant to both proposed alliances, and to avoid the needless re-argument and reconsideration of common issues by interested parties and the Department itself that will necessarily occur if the two proposed alliances are considered separately. Moreover, as with the proposed American-BA alliance, the Department should not act on the proposed United-bmi alliance until an open skies agreement with the United Kingdom is signed. Prior action by the Department with respect to either proposal would be premature and unwarranted. Alternatively, if the Department does not formally consolidate the proceedings, the Department should consider both alliance proposals in one decision and authorize the parties to use the confidential portion of the evidence in each proceeding in presenting arguments in the other proceeding. While not seeking postponement of the answer and reply dates in the American-BA proceeding, Northwest requests that, under either alternative, the Department authorize the parties in the American-BA alliance proceeding to file supplemental Answers  based on any relevant evidence in the documents submitted by United-bmi and their Star Alliance partners on October 18, 19, and 22 and to which the parties do not yet have access.

Counsel:  Northwest, Megan Rae Rosia, 202.842.3193

United Air Lines, Inc. and British Midland Airways Limited, Austrian Airlines Osterreichische Luftverkehrs AG, Deutcshe Lufthansa, A.G., and Scandinavian Airlines System and United Air Lines, Inc. and British Midland Airways Limited 

By:  Read Van de Water

American Airlines, Inc. and British Airways PLC and United Air Lines, Inc. and British Midland Airways Limited, Austrian Airlines Osterreichische Luftverkehrs AG, Deutcshe Lufthansa, A.G., and Scandinavian Airlines System and United Air Lines, Inc. and British Midland Airways Limited 

Counsel:  American Airlines

Counsel:  Continental and Crowell Moring

Counsel:  Delta and Shaw Pittman

Counsel:  United and Wilmer Cutler

Counsel:  Virgin Atlantic Airlines

American Airlines, Inc. and British Airways PLC and United Air Lines, Inc. and British Midland Airways Limited, Austrian Airlines Osterreichische Luftverkehrs AG, Deutcshe Lufthansa, A.G., and Scandinavian Airlines System and United Air Lines, Inc. and British Midland Airways Limited 

Counsel:  Crowell Moring, Bruce Keiner, 202-624-2500

American Airlines, Inc. and British Airways PLC; United Air Lines, Inc. and British Midland Airways Limited, Austrian Airlines Osterreichische Luftverkehrs AG, Deutcshe Lufthansa, A.G., and Scandinavian Airlines System;  and U.S.- U.K. Alliance Case

We find that the consolidation of the AA/BA and United/bmi cases will improve our ability to analyze and correctly decide the issues presented in each case and will not delay our decision on either alliance proposal. Our ruling on the consolidation motion is thus consistent with our authority under 49 U.S.C. § 46102 to "conduct proceedings in a way conducive to justice and the proper dispatch of business." Our procedural rules state that we may consolidate proceedings when that "will be conducive to the proper dispatch of [the Department's] business and to the ends of justice and will not unduly delay the proceedings.

The AA/BA and United/bmi applications present major common issues, since our decision on each proposal will require us to consider the current state of competition in U.S.-London markets and the impact of each alliance on competition in those markets. Those issues according to several parties will require us to consider the ability of other U.S. airlines to enter Heathrow and to expand service there. As Northwest has pointed out, moreover, AA/BA and United/bmi believe that the potential implementation of the other alliance proposal is relevant to our consideration of their own proposal. AA/BA contend that the existence of the United/bmi alliance is one factor showing that their own alliance will not reduce competition. United/bmi contend, on the other hand, that their alliance is necessary for creating a competitive counterweight to the alliance between AA and BA.

We therefore agree with Northwest, Continental, Delta, and Virgin Atlantic that the issues involved overlap to the degree that simultaneous consideration is warranted; still more important, the resolution of each pair of proceedings is likely to affect the outcome of the other. Consolidation will avoid duplication of resources both for the Department and for the parties, and will permit us to consider the merits and issues together and reach a single, comprehensive decision. Consolidation will allow parties and the Department to address the common issues involved more efficiently and avoid the need otherwise to cross-reference evidence and issues being considered on separate procedural tracks. In addition, consolidation should result in speedier disposition of the various applications than would have been possible on separate procedural tracks.

Consolidating the cases will thus cause no delay in our decision on either alliance proposal. If we were not consolidating the cases, we would still consider them simultaneously. United and its partners themselves, even as they oppose consolidation, urge us "to proceed to a consideration of both alliance applications on an expedited basis." Our decision here permits us to do just that. Their concern that "the American/BA alliance raises far more controversial competition issues than does the United/bmi application" is thus not determinative-neither case will be delayed, and both should ultimately be further expedited.

We disagree, however, that we must immediately direct American and BA to make public certain material already in the confidential portion of the record. Our foremost concern is that due process be satisfied by the parties having access to this material, and this has been done. Continental has not claimed that it will be unable to present its arguments if the information remains confidential. We do not generally rule on confidentiality motions in a piecemeal fashion, and we see no need to do so here. We will rule on the confidentiality motions by a separate order.

Finally, Continental's request to ensure the availability to European authorities of confidential material in the American/ BA proceeding has been mooted by the joint Applicants' waiver of confidentiality for that purpose. To the degree that, as Northwest argues, the Joint Applicants' waiver is limited, we leave to the European competition authorities the decision as to whether they require additional information. Those authorities have ample power and jurisdiction to seek what data they need; moreover, in contrast to Northwest's view, we have no power to bind those authorities to our confidentiality standards-the confidentiality of material submitted to them is a matter between them and the parties to their proceedings. We therefore dismiss the fourth portion of Continental's motion without reaching the merits.

By:  Read Van de Water

U.S.- U.K. Alliance Case; and United Air Lines, Inc. and British Midland Airways Limited, Austrian Airlines Osterreichische Luftverkehrs AG, Deutcshe Lufthansa, A.G., and Scandinavian Airlines System

Counsel:  Wilmer Cutler, Jeffery Manley, 202.663.6000, jmanley@wilmer.com

U.S.- U.K. Alliance Case; and United Air Lines, Inc. and British Midland Airways Limited, Austrian Airlines Osterreichische Luftverkehrs AG, Deutcshe Lufthansa, A.G., and Scandinavian Airlines System

Counsel:  Wilmer Cutler, Jeffery Manley, 202.663.6000, jmanley@wilmer.com

U.S.- U.K. Alliance Case; and United Air Lines, Inc. and British Midland Airways Limited, Austrian Airlines Osterreichische Luftverkehrs AG, Deutcshe Lufthansa, A.G., and Scandinavian Airlines System

Counsel:  O'Melveny Myers, Benjamin Bradshaw, 202.383.5300, bbradshaw@omm.com

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